Interview on Hot Breakfast, Triple M

Joe Hockey has just joined us, the Federal Treasurer. Joe welcome and thanks for coming in to Triple M this morning.

TREASURER:

Fantastic to be here. It’s pretty mild, it’s much milder than Canberra.

PRESENTER:Oh mate, it was cold the other day but by in large Melbourne’s weather is pretty good. It’s cold in winter, wear a coat as I always say but it’s pretty good, today’s going to be 15, tomorrow and the weekend up to 19 degrees.

PRESENTER:Do you know one of the things we like about the Treasurer, is that he kick starts our local economy here in South Melbourne, because he normally comes in here with his own catering and you visited a shop, last time you were here you visited a pie shop last time, but you were at the Old Paper Shop deli which is a bit of an institution here in South Melbourne Joe and you met the team down there?

TREASURER:

Yeah, they’re a great bunch across the road, I have to kickstart with a coffee. But they’re a great example of the sort of small business that we’ve been targeting in the Budget you know, and I asked them are you family? And they said well yeah, sort of, yeah of course. So well are you related? Oh well, go out the back to the kitchen and there’s a lady from Russia and someone else from Iraq…

PRESENTER:

They didn’t think you were from Immigration did they Joe? [laughter]

TREASURER:

No, I went back into the kitchen and I said I’m just here to check that you pay your tax [laughter].

PRESENTER:

Joe went to pay his bill he said Visa, and three people jumped out the back window [laughter].

TREASURER:

Gorgeous people starting so early in the morning and beautiful coffee.

PRESENTER:

You just nearly knocked us over in your explanation because I think one of the great things, and congratulations on your Budget I think it’s been really well received. But the $20,000 kick start has got everyone excited who runs a small business, and using them as an example, were you just saying they can claim the $20,000 as many times as they like for individual products?

TREASURER:

That’s right, so if they’re buying a new fridge and it’s $18,000 they can write that off 100 per cent against their tax on 1st July…

PRESENTER:

So that’s over – so not $2,000 and you go and buy a van, you’ve got another $20,000 have you?

TREASURER:

Yeah every item, as long as each individual item is less than $20,000 you can go and write 100 per cent of it off against your tax.

PRESENTER:

And I can keep doing that every week for the next ten weeks, up to…

TREASURER:

Yeah you can keep doing it for the next two and a quarter years and the reason why is we want people to go out and have a go. You know, if it’s going to help them to have heaters or if it’s going to help them to have new kitchen equipment…

PRESENTER:

Or a computer for doing the, you know, tax return.

TREASURER:

Yeah, the tax return. Any of that, it’s going to make a difference to them. It helps them to be more productive, it helps their business and hopefully they’ll employ more people.

PRESENTER:

Joe just tell us the rationale, on the $2 million, why’s $2 million the figure?

TREASURER:

Well, it covers 96 per cent of businesses, but importantly two thirds of small businesses actually aren’t companies. So, when we looked at it, giving a tax cut for companies of 1.5 per cent that’s all well and good, that’s terrific, and Bill Shorten last night said he’d give, go up to 5 per cent, well that’s terrific. But you can’t leave out the other two thirds of small businesses that are sole traders, partnerships and so on. Or tradies who are not incorporated. So we’re giving them a tax cut of up to $1,000 a year and then on top of that you’ve got that depreciation, that accelerated depreciation.

PRESENTER:

And at some stage you’ve got to make some money as well through taxation [inaudible]…

TREASURER:

Well that’s exactly right and that’s the bottom line. At the end of the day, they’re going to pay tax, well they have to pay tax to get the depreciation. So, we want people to make money…

PRESENTER:

So let’s get some people, 133353, because we didn’t understand that and we read it pretty tightly. I thought it was a $20,000 that was it, cap one-off. 133353.

TREASURER:

There’s one further thing. If they’ve already got a pool of assets that they’re depreciating, they can write it off as well, the pool up to $20,000 on existing assets.

PRESENTER:

Wow.

TREASURER:

And by the way they can buy second hand assets as well, less than $20,000. So, you can buy a second hand ute or 4-wheel drive for business.

PRESENTER:

Tools.

TREASURER:

As long as it’s less than $20,000 new or used you can write it off instantly.

PRESENTER:

It’s the gift that keeps on giving Joe, it’s got us all smiling this morning. 133353, can I use [inaudible] as an example, maybe runs his own production company and our producer out there a small business and has an ABN, is that the sort of person that qualifies as well? You don’t have to be a tradie?

TREASURER:

No, no, no. Absolutely. Any small business, big or small, whether you have employees or not. But there’s a couple of other things, if you’re a small business and you have some employees and they’ve got a mobile phone and a tablet, at the moment you have to pay fringe benefits tax on the second device. We’ve abolished all fringe benefits taxes on all these devices.

PRESENTER:

Okay.

TREASURER:

So, a tradie often has a tablet of some form or an iPad in the van and has a mobile phone. If he’s an employee for someone else who’s a plumber or whatever the case, he currently, his employer has to pay FBT, we’ve abolished all that.

PRESENTER:

Okay, we’re not going to get into the politics or anything else of all this, Joe Hockey’s put the Budget through, hopefully it will get through the Senate and let people have their go…

TREASURER:

Well this is going through, so it’s started already.

PRESENTER:

Great, so…

TREASURER:

Go out there and do it.

PRESENTER:

Your calls next on Triple M’s Hot Breakfast, Joe Hockey explaining what it means actually to you as you drive to work today, what he’s trying to do as the Treasurer of Australia. Joe Hockey our special guest on Triple M’s Hot Breakfast for Woolworths, we’ll be back in a second with your calls.

[MUSIC]

PRESENTER:

Joe Hockey the Treasurer is in. As I said we’re going to leave the politics aside and let Joe explain to our callers and to us what exactly he’s trying to get through this Budget and how this affects us, and positively affects us. Jack from Narre Warren is on the line, g’day Jack?

CALLER:

Yeah, g’day Eddie how are you going?

PRESENTER:

Good mate, you’ve got the floor, you’re speaking to the Treasurer Joe Hockey.

CALLER:

Thanks very much. Joe, just a quick question, in regard to the $20,000 if you buy, let’s just say you buy a car for the business that’s worth $23,000 can you still claim $20,000 of the purchase or you’ve gone over the threshold?

TREASURER:

No, you do go over the threshold but it goes into a pool at any rate if you’re a business under $2 million. You know, as the pool, you go through a general pool that you write off over I think about four years, depending on…

PRESENTER:

The extra $3,000, the $20,000 is deductable [inaudible]?

TREASURER:

[inaudible]

CALLER:

And also Joe, are you, would you sort of recommend for businesses to possibly go out and then get loans to then spend the $20,000? Is everything then tax deductable such as the interest on the loan as well as the purchase?

TREASURER:

Sure, the interest on the loan is tax deductable for a business, yeah it is, provided the item is for work. Look interest rates are at record lows at the moment, that is one of the reasons we want people to go and have a go because interest rates are at record lows.

CALLER:

Of course the banks would like that as well wouldn’t they?

TREASURER:

Well, yeah, but I mean you’d like to get the money.

PRESENTER:

Everyone’s happy.

TREASURER:

Yeah everyone should be happy. The people that are hurting the most at the moment in relation to low interest rates are a lot of self-funded retirees who have money in the bank and try and live off the interest.

PRESENTER:

Can we get the banks to pass on the full rate Joe? Do you have any jurisdiction over that?

TREASURER:

Oh…

PRESENTER:

No, no, Joe’s got one jurisdiction over this. Is the government guarantee still in place for the…

TREASURER:

Yeah, yeah, yeah.

PRESENTER:

Well there’s your leverage…

TREASURER:

Yeah, yeah, no I’ve said it to them very bluntly. I have, and in some cases, not all the money the banks get. See roughly in the past about a third of what the banks lend to us on our mortgages or credit cards, they themselves have to borrow from overseas. So, they go and borrow it from overseas, then lend it to us and they pay the interest. So there are other factors at play, it’s not just our savings that go to the…

PRESENTER:

That was the [inaudible] cost of money that they used to come up with a few years back. But it’s cheaper overseas than it is here…

TREASURER:

Well, in some cases it is.

PRESENTER:

But it’s up to them to go find it [inaudible]. Sorry bankers we’d like to actually get you to do some work for those bonuses you’re getting, go find the money somewhere.

TREASURER:

No I’m not crying tears for them, don’t worry.

PRESENTER:

So don’t forget the share price of banks has been held up by the support of the guarantee of the people of Australia, so you’d expect that when they [inaudible] that’s the way to hit them.

PRESENTER:

100 per cent. Glenn’s on the line from Beaconsfield, you’re talking to the Treasurer Joe Hockey, Glenn.

CALLER:

Yeah, g’day Joe, fantastic thank you very much finally we’ve got this recognition for small businesses. I’ve been going since ‘06 and really struggled over the time. People have realised that we’re the backbone for this state and country basically.

TREASURER:

Absolutely.

PRESENTER:

So Glenn tell me how does this work for you mate? Give us an example of why you’re happy this morning with what Joe Hockey has brought through in the Budget?

CALLER:

Well I’ve got five employees now. Started off as I said with one apprentice, I’ve got four under me at the moment. Look, just struggling through year by year, doing my own books. It’s very hard, you need book keepers and all the like as you get bigger. I don’t really want to become too big it’s scary to take that extra step. But just chugging along…

PRESENTER:

Can we ask you Glenn what will you buy now that you know you can get a tax deduction on individual items up to the $20,000 threshold?

CALLER:

Oh look, a car’s definitely on the mark. We just paid off one recently, I was actually looking – walked into a car yard yesterday basically and had a bit of a look. It sort of got my interest a bit more to upgrade. You don’t want to overdo it, guys out there, don’t go crazy but be realistic of what your pocket is. Your loans, what your overheads are, because you don’t want to go and put yourself in anymore trouble as businesses can do…

PRESENTER:

What we’ll do, with the first 20, go and buy a new phone will you? [laughter]

TREASURER:

But that’s a great story Glenn, I mean that’s a terrific story. He’s got a number of employees, he’s been thinking about it. He can go up to $20,000, it doesn’t have to be a new van but he can go out and have that go. With record low interest rates, they certainly don’t seem to be going up any time soon, there’s – now’s the time. A quarter of small businesses are in Victoria, all Australian small businesses are in Victoria, and we’ve done a lot for farmers as well. Do you guys broadcast out?

PRESENTER:

Yeah, absolutely.

TREASURER:

Great initiatives in relation to farmers. In particular…

PRESENTER:

Collins Street, they’re all farmers [laughter].

PRESENTER:

Hey Joe, there’s one other issue that we need to run by you before you go and you’ve got a big day and I know you’ve got to keep moving. Where do you sit on Johnny Depp’s dogs, we need to find out?

TREASURER:

Oh, can you ride them can you? Throw a saddle over them? [laughter].

PRESENTER:

That might be the end of Johnny Depp’s dogs… [inaudible].

TREASURER:

Oh it’s a dog of a life isn’t it…

PRESENTER:

Barnaby’s kidding himself isn’t he?...

PRESENTER:

No, I’m with Barnaby on this, absolutely [inaudible]…

PRESENTER:

You can’t kill Johnny Depp’s dogs…

TREASURER:

I think he’s got to get them out, I think. Look, he’s got to play by the rules like everyone else. If those dogs bring in some sort of exotic Hollywood disease or virus…

PRESENTER:

But the [inaudible] suddenly comes in and wipes out our cattle…

PRESENTER:

Boo and Pistol are going to put an end to Australia are they?

TREASURER:

What are their names? What are their names?

PRESENTER:

Boo and Pistol [inaudible]

PRESENTER:

No get em’ out, you can’t do that [inaudible].

TREASURER:

I’m with Eddie, I’m with Eddie.

PRESENTER:

Great for international relations to send Johnny Depp back with a threat we’re going to kill his dogs, come on you two…

TREASURER:

I tell you it won’t be that easy for him to get them back into the US either. I mean, they’ve got their own quarantine laws and I think he’s going to have trouble both sides.

PRESENTER:

He’s going to be stranded there… [inaudible]

TREASURER:

Dogs will be going out the door… [inaudible]

PRESENTER:

We’ve got all the big issues covered here this morning.

PRESENTER:

Yeah, good stuff. Joe thanks for dropping by.

TREASURER:

Thanks guys, great to be here.

PRESENTER:

Go and grab another coffee across the road from the Paper Shop deli….

TREASURER:

It’s a cracker isn’t it.

PRESENTER:

Don’t worry about the $20,000, you’ve given them about $100,000 worth of publicity.

TREASURER:

The Old Paper Shop, there you go again.

PRESENTER:

And I see Mike Willesee, I didn’t realise Mike is working with you these days. Mike Willesee junior of course, he was a Sky News extraordinaire, great news reporter but also great news reader.